JPMorgan Chase & Co. developed a messaging protocol to provide automated transaction processing for its worldwide trading network.
Now it plans to give it away.
The New York banking company said this week that it would offer the technology to the market as open-source computer code, called the Advanced Message Queuing Protocol, and that it would be available to other companies to use and develop.
John O’Hara, a vice president and distinguished engineer in the JPMorgan investment bank in London, explained the reason for the offer: “We’re a bank, not a software company.”
Banks have typically written their own interfaces to tie together such systems, Mr. O’Hara said in an interview Thursday.
“If something is such a necessary utility, why shouldn’t the entire industry bear the cost?” he said. By working with a group of technology companies to offer the technology through open source, everyone can benefit, he said. “Our potential to reduce our costs is greater than our potential to sell it.”
Several technology companies said that they would work to develop the protocol and that they planned eventually to establish it as an official technical standard for use with service-oriented architectures, which enable different software applications to share information for automated processing.
An analyst said the move frees JPMorgan Chase from the expense of maintaining the protocol while enabling different computer systems to work together.
Mr. O’Hara said that the company developed the system to lash together a mixed network of trading systems around the world.
JPMorgan Chase is connecting 800 users on five continents in its global trading group, which uses a variety of programming languages including C-Sharp, C-Plus Plus, and Java running on operating systems including Linux, Sun Solaris, and Microsoft Windows. The system is to go live in August, he said.
Its promoters say the protocol is comparable to e-mail, with message servers, queues, and in-boxes. But where e-mail is designed to deliver messages by human readers, this protocol is designed to deliver the messages to a client software application.
Such services exist as application programming interfaces within individual programming languages. Java, for instance, has an API called Java Messaging Services, but Mr. O’Hara said, “You couldn’t build JMS into the fabric of your network,” because it could not deliver messages to applications written in other languages.
Eric Newcomer, the chief technology officer of Iona Technologies in Dublin, said on a conference call Tuesday that this protocol plugs “one of the largest open holes left in middleware” by enabling communications among different languages and operating systems.
Iona is one of the companies in a working group to develop the protocol. Others are the Internet equipment maker Cisco Systems Inc. of San Jose; the Linux company Red Hat Inc. of Raleigh; Envoy Technologies Inc. of Iselin, N.J., a specialist in application connectivity; iMatix Corp. of Brussels, a developer of open-source tools; and 29West Inc. of Warrenville, Ill., a specialist in high-speed data messaging.
The development effort is being coordinated by Twist, the Transaction Workflow Innovation Standards Team, an industry group that promotes electronic standards for corporate cash management and transaction processing.
The protocol was introduced as version 0.8. Members of the working group said they expected to develop it to version 1.0 over the next 18 months and would then offer it to an international standards body for official adoption.
While JPMorgan Chase developed the protocol for internal use, Mr. O’Hara said it could also help companies to automate data sharing with one another when they use different programming languages and operating systems.
“We don’t have an open transport to go on,” he said. “When you have hundreds of trading partners, that can be a drag on the industry.”
Peter Kastner, a vice president and research director at Aberdeen Group in Boston, agreed that a common protocol could boost business-to-business automation. “More and more today, you’ve got B-to-B communications going on,” and this could eliminate a stumbling block, he said.
It could also save JPMorgan Chase money, he said.
“I think what Morgan is doing is brilliant from a business standpoint,” Mr. Kastner said. “If they had kept the project in-house, they would be looking at the going-forward costs of maintiaining the platform.”
